Let $g$ be a function of $y_1$ and $y_2$;
$g = f(y_1, y_2) = y_1 \times y_2$. And further let
$y_1 = x^2$ and
$y_2 = 3\sin(x)$
Therefore $g = 3x^2 \sin(x)$. The derivative with respect to $x$ then becomes
$\frac{dg}{dx} = 6x\sin(x) + 3x^2 \cos(x)$.
Now I would like to compute the same derivative using the chain rule. So
$\frac{dg}{dx} = \frac{1}{2}\frac{dg}{dx} + \frac{1}{2}\frac{dg}{dx} = \frac{1}{2}\frac{dg}{dx}\frac{dy_1}{dy_1} + \frac{1}{2}\frac{dg}{dx}\frac{dy_2}{dy_2} = \frac{1}{2}\frac{dg}{dy_1}\frac{dy_1}{dx} + \frac{1}{2}\frac{dg}{dy_2}\frac{dy_2}{dx} = \frac{1}{2}y_2 \times 2x + \frac{1}{2} y_1 \times 3\cos(x) = 3x\sin(x) + \frac{3}{2}x^2\cos(x) $
Which is off by the factor $\frac{1}{2}$.
The algebra breaks down at some point here. Can anyone see where am going wrong?
The issue arises because you are abusing notation. If you write out all the functions involved, then it is harder to go wrong.
Let $f$ be given by $f(y_1,y_2)=y_1y_2$.
Let $h=(h_1,h_2)$ where $h_1(x)=x^2$ and $h_2(x)=3 \sin(x)$.
You are looking for the derivative of $g=f\circ h $, i.e. the derivative of $g(x)=f(h(x))=f(h_1(x),h_2(x))$
According to the chain rule this is
$$g'(x)=f_1'(h(x))\cdot h_1'(x)+f_2'(h(x))\cdot h_2'(x)\tag{1}$$
where $f_j'$ denotes the partial derivative of $f$ with respect to the $j$th argument.
We have $f_1'(y_1)=y_2$, $f_2'(y_2)=y_2$, $h_1'(x)=2x$, and $h_2'(x)=3\cos (x)$. Thus
$$\begin{aligned}g'(x)&=h_2(x)\cdot (2x)+h_1(x)\cdot (3\cos (x))\\ &=(3\sin (x))\cdot(2x)+x^2\cdot (3\cos (x))\\ &=6x\sin(x)+3x^2\cos(x).\end{aligned}$$
In alternative notation $(1)$ can be written as:
$$\frac{dg}{dx}(x)=\frac{\partial f}{\partial y_1}(h(x))\cdot \frac{dh_1}{dx}(x)+\frac{\partial f}{\partial y_2}(h(x))\cdot \frac{dh_2}{dx}(x)$$
or, with a slight abuse of notation (using $y_j$ to denote both the function $h_j$ and a variable) and suppressing arguments of functions:
$$\frac{dg}{dx}=\frac{\partial f}{\partial y_1}\cdot \frac{dy_1}{dx}+\frac{\partial f}{\partial y_2}\cdot \frac{dy_2}{dx}$$
Compare this with your equation:
$$\frac{dg}{dx} = \frac{1}{2}\frac{dg}{dy_1}\frac{dy_1}{dx} + \frac{1}{2}\frac{dg}{dy_2}\frac{dy_2}{dx} $$ On the left you have used $dg/dx$ to denote the derivative of the composite function given by $3x^2\sin(x)$. On the right you have abused notation and used $d g/d y_j$ to denote the partial derivative of $y_1y_2$ with respect to $y_j$. This abuse of notation is not so much of an issue as long as you recognize it as such. However, I think it is this abuse of notation that has led you to write:
$$\frac{1}{2}\frac{dg}{dx}\frac{dy_1}{dy_1} + \frac{1}{2}\frac{dg}{dx}\frac{dy_2}{dy_2} = \frac{1}{2}\frac{dg}{dy_1}\frac{dy_1}{dx} + \frac{1}{2}\frac{dg}{dy_2}\frac{dy_2}{dx}.$$